According to a recent report by Fidelity Investments, 1/3 of Americans plan to make at least one financial resolution in 2019. For the 10th year in a row, the most popular money promises include saving more, followed by paying down debt and spending less. Out of the 2,000 respondents, almost 60% confessed to making mistakes that could derail their progress in the new year, like eating out too often and spending on things they really can’t afford. To make progress in 2019, you need to turn as many of your financial promises into habits.
So, here is the list of 6 money resolutions for 2019 and how you can turn these promises into good money habits:
1 – Save More
Rising interest rates can help make the most of your savings. When the Federal Reserve raised its benchmark rate, yields on savings accounts increased as well. Even though the average interest rate on a savings account is still only 0.2%, some top-yielding savings accounts are now as high as 2.25%. In the new year, switch to a bank that offers at least a 2% return.
Tip: Automate your savings. Decide how much you can afford to save each month and have it automatically transferred from your checking account to a high-interest savings account. It’s a lot easier to spend only what’s in your account than try to resist not spending what’s there.
2 – Pay Off Debt Faster
Higher interest rates means it’s more expensive to borrow. In 2018, American consumer debt hit an all-time high of USD 13 trillion.
And the average credit card interest rate is now over 17%!!!
Focus on decreasing the amount of debt you owe and pay special attention to the debt/loans with the highest interest rates. Paying those down first will save you money long-term.
Tip: Debt/loans carry higher interest rates than saving accounts. Therefore, pay first credit card debts back before you start saving. Start also here by automating payments toward your debt each month. To make your debt go away faster, make it a rule that whatever financial gifts your receive, you allocate at least 25% toward paying off your debt.
3 – Spend Less
Tracking your spending is hard. Nobody likes doing it because it’s painful to see how much you’re actually spending. But you have to get your spending under control. An easy way to get your spending under control is by downloading the app Pocketguard. It tells you how much you have for spending each day, week, or month after accounting for bills and savings goal contributions. You’ll see how much money is left.
Whatever money is left at the end of the day, you can decide to deposit into an emergency fund or raise the amount that is automatically transferred to your savings.
Tip: When money is going to Netflix, Hulu, ESPN, and Apple Music without you even seeing it, it’s easy to forget how much these services are really costing you. Do an audit of all your subscription services and automated payments (when not to yourself for the purpose of saving or paying off debt/loans) and cut the ones you barely use.
4 – Cook More
Promise yourself that you will eat out less in 2019 by cooking more meals at home. You can compound your savings by finding recipes for healthy low-cost meals too, like soups or pasta that still taste delicious but save you a lot in groceries.
Tip: Schedule nights in your calendar when you will cook at home. Stick to your schedule!
5 – Get Cash Back
If you know you can pay off your credit card in full each month, then this is a no brainer. Make 2019 the year you finally sign up for a good cash back credit card. It’s free money that adds up quickly. Visit a site like CreditCards.com and figure out which card best suits you, then apply. Most cash back cards offer between 1%-5% on different purchases.
Tip: Once you sign up for a few cash back cards, write on a piece of paper how much you earn and for what and tape it to each card. If you have a card that gets you 2% cash back on gas, groceries, restaurants and Amazon, write those down. Whenever you checkout, you’ll quickly know which card is going to give you the biggest return.
6 – Start Saving for Vacations Early
Too many people start thinking about their summer travel plans in March or April when it’s time to start booking those trips. The problem is they’ve got hardly anything saved and end up going into debt in order to pay for the trip.
Tip: Start saving early by opening a separate savings account for vacations and travel expenses, then automate a small amount to this savings account each month. When it comes time to book your vacation, you’ll have enough saved up that it won’t be an issue.